Cinch – the Swedish company that provides a suite of services for companies to communicate via APIs and specifically build “customer engagement” – in its global march to grow its business and compete more with Twilio Another acquisition made. . The company today announced that it has acquired MessageMedia, a provider of SMS and other messaging services for businesses to manage customer relationships, user authentication, alerts and more.
The acquisition is being made for $1.3 billion – this includes $1.1 billion in cash and the remaining shares (or in Swedish currency, SEK10,745 based on Cinch’s share price and yesterday’s exchange rate). The deal is expected to close in the second half of this year.
The deal is notable not only for giving Cinch a major entry into the world of business SMS, but also for the timing. Less than a month later, Cinch’s larger rival Twilio announced that it would acquire ZipWhip, another big player in the same field as business SMS, for $850 million.
MessageMedia, based in Melbourne, Australia, is currently also operating in New Zealand, the US and Europe, and is primarily focused on providing services to the SMB market with a self-service platform where customers build services with choice. and can operate. Using the web portal provided by MessageMedia to handle the traffic.
Cinch said it has about 60,000 customers and handles 5 billion+ messages annually. Growth is particularly strong in the US market, where MessageMedia is adding 1,500 new customers each month. As well as SMS, it also provides companies with the technology to build MMS experiences and mobile landing pages, and it also provides them with tools to integrate API gateways, among other features.
Cinch itself says it handles about 150 billion mobile customer engagements for its customers annually, and has 8 of the 10 largest tech companies as customers.
Cinch is publicly traded in Sweden and currently has a market cap of $13.6 billion, and the deal comes just weeks after the company announced it would raise $1.1 billion for more acquisitions, including one from SoftBank. There will be a big chunk of money to come. Its main supporter.
Given the size of the deal announced today, we now know what Cinch had in mind. It’ll be interesting to know whether Cinch’s move to buy MessageMedia preceded Twilio’s for ZipWhip, which certainly doesn’t seem like a coincidence.
“Cinch powers mobile customer engagement for some of the world’s largest brands and technology platforms. With the acquisition of MessageMedia, Cinch will now be able to bring the benefits of increased mobile customer engagement to every small business on the planet,” CEO Oscar Werner told ClearTips. “You will no longer need the deep pockets of an enterprise or the technical skills of an engineer to provide you with a first-class customer experience.”
Cinch has been on a spurt of buying companies in recent times to expand its existing business, not only to communicate in these pandemic-hit times in the huge rush of people using phones and the Internet, but to bulk up. For also. The communications industry has more economies of scale, a business essentially built on amassing incremental revenue.
This fact has led to a lot of consolidation, with Twilio buying out strategic, small businesses in quick order as well.
In this regard, MessageMedia is a strong buy for Cinch as it is generating strong cash. Cinch said MessageMedia expects to make $151 million in profits for the year ending June 30, with gross profit of $94 million and EBITDA of $51 million. The cinch itself is also beneficial.
Other deals for Cinch include Intellicent for $1.14 billion, ACL in India for $70 million and SAP’s digital interconnect business for $250 million.
For its part, MessageMedia pretty much plays and is a product of the same API economy that the likes of Twilio, Stripe, and many others have built on the basis of weaving together very complex services, which the customer then creates in a simple way. Can use lines of code that they integrate into their own digital operations, be it websites, apps or internal systems.
Communications, and especially messaging API-based systems, is estimated to be a $9-13 billion market, Cinch said, with the US accounting for 30%, and the global market is projected to grow between 25-30% by 2024. . SMBs, who may lack the resources to build such equipment from the ground up, are a big part of that activity.
“Mobile messaging offers tremendous ROI but small businesses often lack the tools that meet their specific needs,” Paul Perrett, CEO of MessageMedia, said in a statement. “Serving these customers presents a tremendous opportunity, and with Cinch we can build a global leader in our field.”